Local 282 of the International Brotherhood of Teamsters for many years operated as a Mafia branch office. But though federal prosecutors have succeeded in removing the mob presence, the union apparently still provides its share of opportunities of self-enrichment at the expense of members. On March 8, five persons involved in hauling operations for New York City-area construction projects were indicted in Brooklyn, N.Y. federal court for embezzlement, fraud and unlawful payments. The five-count indictment charges these scams deprived the union of more than $5 million in benefit contributions. Of the five defendants, four have been arraigned; each has pled not guilty. No action has occurred in the months since the indictments, the U.S. Attorney’s Office, Eastern District of New York, told Union Corruption Update.
International Brotherhood of Teamsters Local 282, currently based in Lake Success, Long Island, N.Y. for decades had been in cahoots with the mob. John O’Rourke, president of the union during 1931-65, was a close associate of Lucchese crime family bosses Johnny Dioguardi and Anthony “Ducks” Corallo. Subsequent presidents John Cody (1976-84) and Robert Sasso (1984-92), both of whom wound up in federal prison on racketeering charges, were in the pockets of the Gambino family. Justice Department takedowns in recent years have lessened mob influence, yet the local has been susceptible to theft by other means.
Federal prosecutors allege that during 2007-11, five persons – John Farnsworth, Nicholas Farnsworth, Toni Thomson, William Taylor and Stephen Tripodi – ran an illegal double-breasting (i.e., dual shop) operation. Headquarters was a trucking company, Greenwood 2, LLC, active in hauling construction and demolition debris between project sites and landfills in the New York City area. The owner, John Farnsworth, now 60, in June 2007 had entered into a collective bargaining agreement (CBA) with Teamsters Local 282, requiring his company and its subcontractors to pay more than $30 an hour in drivers’ wages and make scheduled payments to pension, welfare, job training and other union benefit funds. According to the indictment, Greenwood averted these requirements by conducting a substantial portion of its business through nonunion fronts. This allowed Farnsworth and other defendants to underreport the number of hours worked by union employees and pocket benefit contributions. In all, the scheme netted the defendants in excess of $5 million. The nonunion “companies” shared the same offices, yards, drivers, mechanics and office staff as Greenwood.
The indictment also states that during 2008-10 Farnsworth unlawfully paid more than $20,000 to a Greenwood local steward, Stephen Tripodi, to participate in the ruse. In addition, William Taylor, a dispatcher for one of the nonunion companies, Rainbow Transport Corp., allegedly received benefits from the local health plan during 2009-10 by falsely listing himself as a union driver. Two other defendants, Nicholas Farnsworth (John Farnsworth’s son) and Toni Thomson, served as nominal owners of Greenwood and its nonunion fronts.
The indictments are the result of an extensive investigation launched by the New York City Business Integrity Commission (BIC) and later joined by the U.S. Justice Department and several agencies within the U.S. Department of Labor. “It’s a complicated scenario, but the crime itself was pretty simple,” said BIC Commissioner Shari C. Hyman. “They cooked the books and stole from the union.” Robert Panella, Special Agent-in-Charge of the Labor Department’s Office of Inspector General, likewise stated, “The defendants’ alleged actions are in violation of Federal law and violate their obligations to Local 282 and its members.” It’s worth noting that illegal activity likely occurred as a consequence of forced unionism. In New York and New Jersey, each a non-Right to Work state, private-sector workers risk losing their jobs if they fail to pay dues to a union with a CBA in force. If dues were optional, required benefit contributions by Greenwood to Local 282 would have been lower – and so would the company’s incentive to skirt them.